...It is accurate to say Friedman was an early pioneer in reaction to post-Keynesianism, but it is not accurate to label post-Keynesianism one-sided. In fact "only money matters" sounded definitively one-sided to most listeners. Friedman's reaction to Keynesianism is hardly well-founded, though it is admittedly reactionary. As the press report noted, Friedman's emphasis of money is important to the analysis of the business cycle and inflation. But business cycles are not the economy, only one aspect of it. In fact, Friedman's fundamental flaw is his fixation on the business cycle as expressed by the stock market, rather than looking at the whole economy with a wide range of meta-finance concerns such as agricultural economics, labor economics, population economics, the economics of war, pollution, development, and so forth. The list is long and interlinked and any economist ignoring any of part of the list runs the risk of being one-sided.
...The target of Friedman's evangelical crusade was John Maynard Keynes and the Keynesians who dominated government policy since the New Deal. Actually, both Keynes and Friedman were pro-market economists. Their difference was that while Keynes proposed to save the market from its self-destruct tendencies, Friedman asserted that the market could self-correct with a simple governmental monetary policy of focusing on the money supply. Federal Reserve chairman Paul Volcker tried Friedman's formula in 1980 with his "new operating method" of controlling the money supply with sharp interest rate volatility and almost caused the Fed to loose control of the Fed funds rate, the most effective instrument for controlling the money supply without calling on the heavy artillery of the discount rate and bank reserve requirements.
...The collapse of market fundamentalism in economies everywhere is putting the Chicago School theology on trial. Its big lie has been exposed by facts on two levels. The Chicago Boys' claim that helping the rich will also help the poor is not only exposed as not true, it turns out that market fundamentalism hurts not only the poor and the powerless; it hurts everyone, rich and poor, albeit in different ways. When wages are kept low to fight inflation, the low-wage regime causes overcapacity through over investment from excess profit. And monetary easing under such conditions produces hyperinflation that hurts also the rich. The fruits of Friedman test are in - and they are all rotten.
In Nepal, tourism has always been centre-stage when it comes to foreign exchange earning and job creation. It is said that a tourist visiting Nepal supports around a doz-en people. The World Tourism Council estimates that tour-ism in Nepal has created half a million jobs. Direct foreign exchange earnings are close to $20 billion annually, approximately 2.5% of the country’s gross domestic product.
It is imperative that the government and political leaders seriously begin discussing ways to help tourism bounce back. If ever there was a time not to let ideology dictate economy, it is now. Tourism should be guided by five principles — attracting maximum investment through both domestic and foreign sources, flexible labour laws, cutting red tape and establishing effective and efficient management in tourism related areas, and setting up infrastructure and positioning Nepal as a hub of South Asian tourism.
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